ABSTRACT
This chapter analyzes productivity and efficiency by using inclusive wealth as a sustainability measurement. This study extends current measures of sustainability by capturing the efficient utilization of natural capital and other conventional inputs, such as input and carbon damages, as undesirable outputs to a productivity measure for 140 countries from 1995 to 2010. To determine the contribution of each input-output to productivity and technical efficiency, we applied a weighted Russel directional distance and a Luenberger productivity measure. We found that gross domestic product (GDP), natural capital, and carbon damages are the main contributors to productivity change. Natural capital and carbon damages remain significant burdens for many countries’ performance, especially for countries with resource-driven economies and extreme vulnerability to climatic shifts. This finding enhances our understanding of how particular countries can measure and manage their sustainability.
